Canada arrested Huawei's CFO, and the US is seeking to extradite her

Chinese telecom equipment giant Huawei’s Chief Financial Officer Sabrina Meng Wanzhou has been detained by Canadian authorities at the request of the US government, a move that sparked a protest from the Chinese government.

“Wanzhou Meng was arrested in Vancouver on December 1,” Ian McLeod, a Canadian Justice Department spokesman said in an emailed reply to questions. “She is sought for extradition by the United States, and a bail hearing has been set for Friday [December 7].”

“As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms. Meng,” McLeod said.

Meng, 41, was tipped by some mainland Chinese media as a leading contender to succeed her father, Huawei’s founder Ren Zhengfei, to take the helm of the telecom giant. Meng adopted her mother’s surname.

She was arrested because she attempted to evade the trade embargo placed by the US on Iran, ﻿The Globe and Mail reported, citing a Canadian source with knowledge of the arrest. No other details were available.

The Chinese government protested the move in a statement issued shortly after the Canadian government made the detention public.

“At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes to and strongly protests over such kind of actions which seriously harmed the human rights of the victim,” according to a statement issued by China’s embassy in Ottawa.

“The Chinese side has lodged stern representations with the US and Canadian side, urged them to immediately correct the wrongdoing and restore the personal liberty of Ms. Meng Wanzhou.

“We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizen.”

In a statement, Huawei acknowledged the detention and extradition request by the US government.

“Recently, our corporate CFO, Ms. Meng Wanzhou, was provisionally detained by the Canadian Authorities on behalf of the United States of America, which seeks the extradition of Ms. Meng Wanzhou to face unspecified charges in the Eastern District of New York, when she was transferring flights in Canada.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion,” Huawei said.

“Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU,” the company said.

In April, the ﻿Wall Street Journal reported that Huawei was being investigated by New York prosecutors on suspicion of breaking the Iran sanctions.

The report about the US Justice Department’s investigation of Huawei followed news that US prosecutors activated sanctions on another Chinese telecom equipment producer, ZTE, on charges related to its equipment sales in Iran.

ZTE was then subjected to sanctions after the US government determined that it had first attempted to trade illegally with Iran and North Korea, and then subsequently failed to follow through on remedies imposed by the US Department of Commerce.

US firms were banned from selling microchips and other components to ZTE, crippling and nearly killing the company, until the ban was lifted on the orders of US President Donald Trump, after he was contacted by the Chinese government. As part of a new agreement to lift the ban, ZTE paid US$1.4 billion in penalties, reformed its management and installed US-appointed compliance officers.

US Senator Chris Van Hollen, who has co-sponsored legislation meant to keep the ban in place if further violations by ZTE are found, weighed in on Huawei shortly after the announcement by Canada.

“Huawei and ZTE are two sides of the same coin – Chinese telecommunications companies that represent a fundamental risk to American national security. While the Commerce Department focused its attention on ZTE, this news highlights that Huawei is also violating U.S. law,” Van Hollen said.

“At a bare minimum, we must hold both companies to the same standard. More importantly, we need a comprehensive plan to hold the Chinese and their state-sponsored entities accountable for gross violations of the law and threats to our security.”

According to Meng’s biography in the company’s annual report, she joined Huawei in 1993 and held various positions in the company’s finance departments. She is currently one of the board of directors’ deputy chairpersons and the company’s chief financial officer.